OTTAWA (AFP) - Canada's trade swung into virtual balance in January with a deficit of only Can$177 million (S$204 million), compared to a Can$922 million deficit the previous month, the government said Friday.

The improved trade balance surprised economists who had expected a Can$1.5 billion deficit.

Statistics Canada also revised downward by nearly half its initial estimate of the December deficit from Can$1.7 billion.

The change was due to a 1.6 per cent drop in imports to Can$40.8 billion in January, with energy and auto parts imports declining due to the closing of US factories because of harsh winter weather.

Exports rose slightly, 0.2 per cent, to Can$40.6 billion, reflecting a 5.8 per cent increase in prices and a 5.3 per cent drop in volume.

Canada posted a Can$3.6 billion trade surplus with the United States, its top trading partner. Imports from the United States fell to Can$27.1 billion, a 1.8 per cent drop, while exports were down 0.1 per cent at Can$30.7 billion.

Energy imports dropped 7.3 per cent to Can$3.5 billion, mainly because deliveries of crude and crude bitumen were down 16.5 per cent. Energy exports rose 9.2 per cent to Can$10.4 billion, including a 11.6 per cent jump for crude and crude bitumen. Exports of natural gas were up 12.3 per cent.

Agricultural, food and fisheries exports were up 7.4 per cent to Can$2.5 billion, the second highest value on record. It was led by a 21.5 per cent increase in wheat exports.